So how are you getting 1/4 of Apples profit?
20b a year = 5b a quarter.
5/24 = 21% (would be been closer to say 1/5)
Or since they take tax out of it, go with the operating revenue of 28b which is going to tet you closer to 1/6
I’m sure the ROI is massive. I mean, can you even imagine the conversation execs were having when this deal was in the talks?
If Google were to just change their mind for any reason, which I’m doubtful they would, that’d be a missive hit to Apple. I wonder if the deal includes provisions that state Google can’t just change their mind so easily.
I don’t believe Apple would do that to their users though. Best I could see is removing the default, forcing users to pick, and offering description of the pros and cons of each to offset existing biases and make Google look more equal to the rest.
If Google was to turn their back on the deal and Microsoft offered them a similar amount of money they’d push iOS update the following week and switch everyone to Bing IMHO. You can already go and change your default search, vast majority of people don’t bother.
I have used many android phones and currently on my 3rd iphone, here is why I prefer iphone over android;
I like iOS way more than android as os and where android shines in customizability it holds no value to me. Better in app cameras. Overall iPhone has been far more reliable for me and has aged better. Better design. My iPhones have also been cheaper than my flagship androids (never bought newest iPhones).
So personal preference and better experience with iPhones tilts it for me
Facetime, iMessage, comparably good products (people forget its Apple devices vs. the world (Samsung, Google, Sony, etc.))
i would say iOS is more beginner-user friendly than Andriod
I wouldn't care if Apple weren't radically anti consumer, actively working to make products worse for everyone with their BS lockins, walled garden integration, anti-standard, anti-competitive crap.
Honestly I don't think about it that much. This is probably the only time I've ever commented about smart phones like this before.
But I do think it's weird that Americans clamor to pay three times as much for an obviously inferior product. It's just strange to me. Marketing is a helluva drug.
most consumers really don’t care if the product is inferior.
i used an iPhone before, why would i regress to fingerprint unlocks again? i used an iPhone before, im familiar with the OS, don’t wanna take time to learn a new one. i used an iPhone before, why would i switch?
smartphones really don’t have a competitive edge over each other anymore. As long as you have a big screen (check) and a good battery life (check), the rest is just down to whatever the person is most familiar with. pricing is another thing, but alas
ever tried buying an old person a phone? my grandma went from a LG flip phone to a LG smartphone simply because “LG is the one i use”
> development cost of maintaining compatibility to google search
For something just being the default option to a feature they will offer regardless, I'm going to say less than $20B
Apple is guaranteeing an insane amount of traffic to google with a deal like this. There are competitors that would offer money for this deal if google didnt
Which means that it costs them $6B to run the infrastructure for the App Store and to review the behavior of applications to ensure they aren't malicious, and they charge developers 4x what it costs them to operate that service.
Their latest laptops effectively destroy your data such that is irrecoverable if the machine is damaged but they offer an online backup service to protect your data from this.
Edit: lol at apple fanboys downvoting this
I guess people don’t tend to openly carry their MacBooks around much so I have no idea how popular they are, but I certainly see an awful lot of Apple watches and AirPods every day.
Also tbf, mac laptops range from $1,000 to $2,500 (*base* models, specced up approaches 5 figures). So this implies they're selling 3-10x fewer laptops
AirPods and Apple Watches don’t last half as long as MacBooks. People keep MacBooks for 5, 8 or even 10 years. Most people only keep AirPods for 2/3 years.
Nope there is just no need anymore to buy all 1-2 years a new iPhone, the average user can't even spot the difference anymore when a new model comes out.
I like how you asked this question, got three answers from three different people, and they're all totally different. Which is extra impressive because it covers almost every possible choice, 3/4 since it obviously isn't Tax.
The way the expenses are categorized is based on function rather than nature. Wages would be built into product costs (direct wages to build and transport any products, although I believe this is mostly outsourced), service costs (service technicians etc), R&D (researchers, engineers), and SG&A (administrative positions, management, etc).
Its in the detail of Cost of Revenue (for the workers) and Operating Expenses (management and future product development).
Of course there is more in Cost of Revenue than just salaries because the phones are mostly made by subcontractors.
I'm not sure why but as a finance person using a Sankey chart with the profit at the top is irritating. If you flipped the right side I'd be fine with it.
Why should it be more?
They pay corporate taxes at 17%, then owners of the company stock pay at least 15% dividend taxes on profits distributed. Therefore owners are paying a 32% effective tax.
Not to mention they employ over 160,000 employees who they pay salary and payroll taxes for, they cover health insurance at a massively subsidized rate, not to mention the other various taxes they pay like property taxes, gas tax for transporting goods, etc.
What % should they be paying in your view if 32% isnt enough?
You're right, if AAPL is paying 15% in taxes, a wealthy taxpayer who owns AAPL and earns 583k or more per year is paying a 20% rate on dividends which is higher than the 15% I quoted, so even if AAPL is paying 15%, a shareowner is paying 30-35%.
And profits cant all be distributed because if they were the company would have no buffer for a bad year or expansion.
Its a big reason why most small businesses fail, they dont retain enough enough profits to continue to expand or support themselves should they have a bad year.
I still dont know why people find profits to be obscene, its perfectly reasonable and respectable for someone to say "I dont know enough about economics or business to have an informed opinion".
Now do someone making earned income in the top bracket with state taxes.
Or even someone making just under the FICA limit.
In any event, conflating corporate tax and personal income tax is silly. They are not the same thing or on the same money and can't be combined that way. A lot of those dividends aren't taxed at all since they may be in e.g. Roth accounts, or held be people who pay much less than 15% tax rate.
They are though, the owners of the company are paying tax on profits that were already taxed at the corporate level. Itd be vastly more efficient just to tax individuals instead. Or to use excise sales taxes on goods we believe are luxuries, which is a form of progressive taxation, or to reduce estate tax exemptions and curtail the use of trusts. Or to tax capital gains at a higher rate, or remove the step up of cost basis.
Corporate taxes are possibly the least efficient method of taxation, because they are both easy to avoid and easy to make up for via higher prices.
If you have to make your case by making false claims about taxes and overlooking my accurate points, then you don't warrant a seat at this table
On the plus side, your user name checks out
Simple.
The answer is always:
1. Look at the tax that they pay, no matter what it is.
2. Consider that number a travesty of capitalism and demand they pay more.
As long as they are making a profit, they are paying too little tax. And if they aren't making a profit, it is the fault of the executives.
They pay payroll taxes for different reasons entirely. Good on them for paying that, but the argument is that the tax on profit should be higher. It doesn’t make any sense to just start naming a bunch of taxes and act like the more tax categories they pay in, the more taxes they pay relative to anyone else or what’s arguably ethical.
The rest stands with me. I’m not sure what should be considered fair for profit- is 32% enough? How do you determine that?
They pay payroll taxes for different reasons entirely. Good on them for paying that, but the argument is that the tax on profit should be higher. It doesn’t make any sense to just start naming a bunch of taxes and act like the more tax categories they pay in, the more taxes they pay relative to anyone else or what’s arguably ethical.
The rest stands with me. I’m not sure what should be considered fair for profit- is 32% enough? How do you determine that?
Where does profit even go, is that after paying everyone their salaries and bonuses? So, it just goes to upgraded equipment and whatnot, or is that also considered an expense and doesn’t come out of profit?
Depending on what profit *actually is*, I may be inclined to say yeah- it should be up there at like 90% tax for these mega corps.
Because they rely on government funded infrastructure? I dont imagine so in Apple's specific case but many companies use government assistance to justify mininimum wage workers.
More tax money in the system means more investment in areas, rather than being used purely for the next Board member's Yatch fund.
And going after a dozen companies raking in Billions in pure after everything profits means you can relax the tax burden on everyday people? Those who can give more should give more.
I wonder how fines & penalties levied on Apple are categorised? Is it part of cost of revenue? Is it put under tax?
Its not significant enough to be a category on its own, but would be fun to see the tax and profit treatment of that money.
This doesn't explain anything, because it puts all the revenues and expenses into an information-losing blender.
Because it doesn't break out margins on each of the revenue streams.
Services brings in $24B, but what's the OPEX for them? What's the cost of revenue? How does it compare to MacBooks? Does Apple even make a profit on iPads? How much profit?
That's how taxes work? You only pay tax on the money you actually make (Otherwise low margin high volume industries would pay more in tax than total profit and thus cease to exist)
Huh well learned something today. Would be nice if that’s how my taxes worked..
But shit - I’d fucking love to only pay 14% tax. That’s still ridiculously low.
And tim announced a $110 billion stock buyback. I can see that it could be more useful to pay more taxes and spend more on r&d.
Having only the Vision Pro as the only new product and being dud. Jumping around making a vehicle. Tim surly is the go to guy to keep a boat steady while Jobs was the risk taker.
Companies which do stock buybacks have run out of ideas. $8 billion for R&D is a pittance compared to what [Apple has pissed away on kiting its stock price](https://www.fastcompany.com/91118042/apple-stock-share-buyback-largest-us-history-meaning):
> Back in 2018, Apple initiated a share buyback for $100 billion—a record that held until now.
>But between then and now, Apple also initiated five other share buybacks: $75 billion in 2019, $50 billion in 2020, $90 billion in 2021, $90 billion in 2022, and $90 billion in 2023.
Including this year, that's about $600 billion of cash gone up in smoke. No wonder their recent products are lackluster. $8 billion in research per quarter is dwarfed by the bonfire of the equities at over $20 billion per quarter.
Want to know why Boeing has a tough time coming up with new aircraft? Look no further than the [$60 billion they torched in buybacks at the same time they decided on the 737Max](https://www.commondreams.org/opinion/boeing-safety-stock-buybacks).
Microsoft isn't much better, and Meta is about the same. Stock buybacks were considered market manipulation until Ronald Reagan's administration, always a fount of terrible ideas, legalized them in 1982. By sheer coincidence (/s), the decoupling between productivity and wages started right around then: keeping wages down produces more cash for the investor class.
They’re just a different form of dividends that aren’t taxed now but at sale. It wouldn’t make any difference in profit motive. Dividends have been around forever
That's what I can't figure. They have $24B in profit on this chart. Even with a bigger Q1 profit, they're basically spending every dollar of profit on stock buy backs?
What's not to understand? When you take your paycheck, you spend some of your money on necessary expenses like rent and food, and then you save (invest) the rest of it. What else should they do with this money? This profit figure *already* accounts for their R&D expenses, manufacturing costs, cost of materials, logistics, advertising, etc.
So your conjecture is that it's traditional and expected that companies spend 100% of every profit dollar in stock buybacks? And to ask otherwise is heresy?
Believe it or not, once upon a time, companies cared more than just about keeping up their stock price.
Well I'd say it's not unexpected. Their R&D expenses have increased yoy, so they have reinvested some of their profits into increasing R&D. Again, the profit figure you're looking at is already after all expenses have been figured. So I ask you again, what else should they do with that money? Do you think they should dump even more into R&D? But you can't just throw an extra $20 billion in R&D money at your engineering department - it takes time to ramp that up. Infrastructure and headcount can't materialize out of no where. And if they went on a big irresponsible expansion spree, then when the bust comes they'd lay people off and people like you would be saying "They should have planned their resources better!"
Mafia Tactics
Extortion
Intimidation
Coercive control to ensure customer loyalty
We look at you apple shills like you look at the southern Italians and wonder why they let the mafia do that to them.
I can crack open a PC and replace parts. I want it's went into an Apple store with my son's MacBook. I asked that guy behind the counter to open it up so I could see how it was laid out. He said it needed a new power supply. I asked, can I buy one from you? He looked at me, and screwed the thing closed with his proprietary screwdriver, and sniped at me"we don't sell parts." And pushed it back at me with the glare.
>I was going off gross because the average person doesn’t get to deduct their cost of living before paying taxes
If you wanted to do that then shouldnt it be done on revenue not gross profit?
But anyways, businesses are abstractions. At the end of the day every dollar earned by apple will go into the pocket of some individual, and that individual wont be able to deduct their personal living expenses from those earnings.
However, every person is able to deduct expenses that are incurred as a result of engaging in commerce.
> They usually are around 15% and certainly aren’t taxed at 30% annually. Regardless of the minutiae 14% still seems very low but that is apparently an unpopular opinion.
Lets imagine apple makes $100. If they pay 14% tax so they are left with $86. They give that $86 to Tim Cook as a dividend. Tim now pays 15% on that so he is left with $73.10, so overall tax rate is 27%
Their tax rate is 14% according to the chart? 4/28 = .1428
But also all of their employees pay tax, all of their products generate sales tax or VAT in places that have it, they also pay property tax.
One quarter (Q2) and their profit is $24 billion. That is obscene.
As a former Apple stock holder, I hated that they hoarded their money instead of paying a decent dividend. Sure, you’d get a special one-time dividend but those are rare.
Instead they use the hoard to buy back shares, which doesn’t really help individual shareholders. It really helps insiders/executives by “manipulating” price-per-share metrics, which is what many executives have their bonuses tied to. Disgraceful.
Share buybacks absolutely help individual shareholders. Market cap is based on outstanding shares, and by lowering that number it drives the share price up. You’re just seeing growth from share price rather than a dividend. Additionally, share buybacks are not something that the consumer tends to price in. Dividends are really hard to lower without completely destroying consumer confidence.
What do you think you’ll pay taxes on when you sell? Having a paper profit is worthless unless you sell. At least dividends I receive monthly or quarterly and only pay 15% tax. Much lower than if you have a short term gain (40%)
Have you ever heard of a 401k? It's the same idea. Let your money compound without paying taxes until you have to sell. It's a big difference over a long horizon.
Don't you have a VAT tax in the USA? Also, in Europe in most countries large corporates do pay 1-3% of revenue in many countries as some additional tax.
VAT or Sales Tax is paid by the consumer. Corporations will collect it and pass it on to the government, but would not be included in earnings reports.
As far as I am aware, there is no hidden 1-3% revenue tax.
Still,however I look at this it's just crazy. Over 25% of the total revenue ended up as profit. In Europe you will very rarely see number above 10%, 5-8% is kind of more the norm. Apple definitely looks like it is in need of a huge tax increase or some other measures. Do they pay fair wages?
Apple exists in Europe as well, and these figures include sales in Europe. I think Apple is an outlier no matter where you’re from.
Does Apple pay a fair wage? They get their hardware made in Chinese sweatshops, so probably not
Well they are ridiculously overpriced that it shows that brainwashing through marketing works well that's probably one reason. But to answer you, I checked in my country, I found 2 companies that are related to Apple here in the registry, they had a 17% percent rate as profit of total revenue so still high indeed, but lower then the graph
It doesn’t list the tax rate on the chart, it gives the difference for each category year over year. For tax, they paid 5% more tax in Q2 of 2024 than Q2 of 2023.
Isn't the real answer by paying cents per day to slaves in other countries to make their goods which they resell for ridiculous markup? Pretty much the same business model as Nike.
Are we gonna dick wave about who knows how earnings work?
Apple is a consumer electronics company. They realize the plurality of their annual profits in Q1.
So Google paying to be the default search engine for iOS is 1/4 of Apples profit?
How much are they paying per quarter or year?
20b a year , news today
Okay so you didn't read that from the chart right? I was becoming crazy lol
So how are you getting 1/4 of Apples profit? 20b a year = 5b a quarter. 5/24 = 21% (would be been closer to say 1/5) Or since they take tax out of it, go with the operating revenue of 28b which is going to tet you closer to 1/6
1/6 is still insane. Every year, Google invests into Apple and producing about 1/6 their total profit. Holy shmoley.
Seems huge, but with how many apple products are in the U.S. + world, I wonder what the ROI is on that investment for google being the default search.
I’m sure the ROI is massive. I mean, can you even imagine the conversation execs were having when this deal was in the talks? If Google were to just change their mind for any reason, which I’m doubtful they would, that’d be a missive hit to Apple. I wonder if the deal includes provisions that state Google can’t just change their mind so easily.
What would happen to Google if Apple switched to Bing on all its iOS devices? Probably just as bad if not worse for them.
I don’t believe Apple would do that to their users though. Best I could see is removing the default, forcing users to pick, and offering description of the pros and cons of each to offset existing biases and make Google look more equal to the rest.
If Google was to turn their back on the deal and Microsoft offered them a similar amount of money they’d push iOS update the following week and switch everyone to Bing IMHO. You can already go and change your default search, vast majority of people don’t bother.
Because Google main product is their search engine. IPhones are a large chunk of the market. Make sense. Very expense but someone did the math
even more importantly iPhones have a deathgrip on the US market, the most valuable advertising market.
I will never understand why people want an iPhone over an android.
I have used many android phones and currently on my 3rd iphone, here is why I prefer iphone over android; I like iOS way more than android as os and where android shines in customizability it holds no value to me. Better in app cameras. Overall iPhone has been far more reliable for me and has aged better. Better design. My iPhones have also been cheaper than my flagship androids (never bought newest iPhones). So personal preference and better experience with iPhones tilts it for me
Facetime, iMessage, comparably good products (people forget its Apple devices vs. the world (Samsung, Google, Sony, etc.)) i would say iOS is more beginner-user friendly than Andriod
let's move on from which cool billion dollar company has the coolest metal box?
I wouldn't care if Apple weren't radically anti consumer, actively working to make products worse for everyone with their BS lockins, walled garden integration, anti-standard, anti-competitive crap.
Honestly I don't think about it that much. This is probably the only time I've ever commented about smart phones like this before. But I do think it's weird that Americans clamor to pay three times as much for an obviously inferior product. It's just strange to me. Marketing is a helluva drug.
most consumers really don’t care if the product is inferior. i used an iPhone before, why would i regress to fingerprint unlocks again? i used an iPhone before, im familiar with the OS, don’t wanna take time to learn a new one. i used an iPhone before, why would i switch? smartphones really don’t have a competitive edge over each other anymore. As long as you have a big screen (check) and a good battery life (check), the rest is just down to whatever the person is most familiar with. pricing is another thing, but alas ever tried buying an old person a phone? my grandma went from a LG flip phone to a LG smartphone simply because “LG is the one i use”
No, Google's main product is it's advertising platform and user data.
This chart is quarterly
The question is: how much revenues and income does Google generate from this deal on Apple products?
What’s Apple’s development cost of maintaining compatibility to google search though? I imagine they want the best user experience
Apple wants the best profit experience
User experience and profit are very highly correlated
I honestly wish it was true, but you'd be surprised how much money some hot trash can rake in--esp on the enterprise side
> development cost of maintaining compatibility to google search For something just being the default option to a feature they will offer regardless, I'm going to say less than $20B
Apple is guaranteeing an insane amount of traffic to google with a deal like this. There are competitors that would offer money for this deal if google didnt
Interesting, so iPhone revenue is more than twice the revenue from all other products, combined.
24B from services is actually quiet impressive. This is the segment Apple has done a good job growing / maintaining.
What services does this encompass? Apple music and iCloud are the only paid services I can think of, I didn't think they were *that* big.
30% of every single paid app on the appstore and the same for all in app subscriptions and microtransactions
Ahh that makes more sense. Another comment mentioned appletv so all of that combined seems more like it would add up to 24B.
I'd hazard a guess that app microtransactions utterly dwarf apple tv subs revenue
Which means that it costs them $6B to run the infrastructure for the App Store and to review the behavior of applications to ensure they aren't malicious, and they charge developers 4x what it costs them to operate that service.
Apple TV as well.
Apple Arcade and Fitness+ too, but as mentioned elsewhere, App Store revenue is probably the bulk
Their latest laptops effectively destroy your data such that is irrecoverable if the machine is damaged but they offer an online backup service to protect your data from this. Edit: lol at apple fanboys downvoting this
I am more suprised that Airpods + apple watch generate already more than MacBooks.
I guess people don’t tend to openly carry their MacBooks around much so I have no idea how popular they are, but I certainly see an awful lot of Apple watches and AirPods every day.
Also tbf, mac laptops range from $1,000 to $2,500 (*base* models, specced up approaches 5 figures). So this implies they're selling 3-10x fewer laptops
AirPods and Apple Watches don’t last half as long as MacBooks. People keep MacBooks for 5, 8 or even 10 years. Most people only keep AirPods for 2/3 years.
Just replaced my 2013 mbp. Old one is still going strong, but no longer met my needs performance wise.
I believe iphone includes the app store and icloud. Its not just phone sales
app store is under services
And yet it's tanking. Maybe they are finally too expensive?
Nope there is just no need anymore to buy all 1-2 years a new iPhone, the average user can't even spot the difference anymore when a new model comes out.
I see these income statements all the time, and I still don’t know, what expense is paying employees in this chart?
I like how you asked this question, got three answers from three different people, and they're all totally different. Which is extra impressive because it covers almost every possible choice, 3/4 since it obviously isn't Tax.
SG&A includes wages in the A for administrative
It’s also in R&D
Software/hardware engineers would fall under R&D i imagine.
The way the expenses are categorized is based on function rather than nature. Wages would be built into product costs (direct wages to build and transport any products, although I believe this is mostly outsourced), service costs (service technicians etc), R&D (researchers, engineers), and SG&A (administrative positions, management, etc).
It's buried in sg&a, r&d, and cost of sales/cost of goods sold
Its in the detail of Cost of Revenue (for the workers) and Operating Expenses (management and future product development). Of course there is more in Cost of Revenue than just salaries because the phones are mostly made by subcontractors.
I'm not sure why but as a finance person using a Sankey chart with the profit at the top is irritating. If you flipped the right side I'd be fine with it.
"So what is the company's bottom line?" "That's the profit -- at the top."
Maybe I'm Naïve in how tax works for large companies. But how come the tax is around 17% of their profit?
corporate tax rate is 20%. they probably have misc tax credits to bring their effective rate down.
These are GAAP financials. GAAP tax expense is not representative of actual taxes owed/paid for a given year.
Should be way more but capitalism
Why should it be more? They pay corporate taxes at 17%, then owners of the company stock pay at least 15% dividend taxes on profits distributed. Therefore owners are paying a 32% effective tax. Not to mention they employ over 160,000 employees who they pay salary and payroll taxes for, they cover health insurance at a massively subsidized rate, not to mention the other various taxes they pay like property taxes, gas tax for transporting goods, etc. What % should they be paying in your view if 32% isnt enough?
They are not paying 32% taxes. They don't distribute all of those profits. Their taxes are also less than 15% at $4B on $28B profits.
You're right, if AAPL is paying 15% in taxes, a wealthy taxpayer who owns AAPL and earns 583k or more per year is paying a 20% rate on dividends which is higher than the 15% I quoted, so even if AAPL is paying 15%, a shareowner is paying 30-35%. And profits cant all be distributed because if they were the company would have no buffer for a bad year or expansion. Its a big reason why most small businesses fail, they dont retain enough enough profits to continue to expand or support themselves should they have a bad year. I still dont know why people find profits to be obscene, its perfectly reasonable and respectable for someone to say "I dont know enough about economics or business to have an informed opinion".
Now do someone making earned income in the top bracket with state taxes. Or even someone making just under the FICA limit. In any event, conflating corporate tax and personal income tax is silly. They are not the same thing or on the same money and can't be combined that way. A lot of those dividends aren't taxed at all since they may be in e.g. Roth accounts, or held be people who pay much less than 15% tax rate.
They are though, the owners of the company are paying tax on profits that were already taxed at the corporate level. Itd be vastly more efficient just to tax individuals instead. Or to use excise sales taxes on goods we believe are luxuries, which is a form of progressive taxation, or to reduce estate tax exemptions and curtail the use of trusts. Or to tax capital gains at a higher rate, or remove the step up of cost basis. Corporate taxes are possibly the least efficient method of taxation, because they are both easy to avoid and easy to make up for via higher prices.
If you have to make your case by making false claims about taxes and overlooking my accurate points, then you don't warrant a seat at this table On the plus side, your user name checks out
What false claims am I making? To be fair, I dont wish to sit at the kids table using a booster seat, so feel free to sit with the other children
I explained that not all owners pay dividen taxes. Plus not all profits are distributed You are just full of shit basically.
Simple. The answer is always: 1. Look at the tax that they pay, no matter what it is. 2. Consider that number a travesty of capitalism and demand they pay more. As long as they are making a profit, they are paying too little tax. And if they aren't making a profit, it is the fault of the executives.
"We have demands!" "OK, what are they?" "Yes"
They pay payroll taxes for different reasons entirely. Good on them for paying that, but the argument is that the tax on profit should be higher. It doesn’t make any sense to just start naming a bunch of taxes and act like the more tax categories they pay in, the more taxes they pay relative to anyone else or what’s arguably ethical. The rest stands with me. I’m not sure what should be considered fair for profit- is 32% enough? How do you determine that?
They pay payroll taxes for different reasons entirely. Good on them for paying that, but the argument is that the tax on profit should be higher. It doesn’t make any sense to just start naming a bunch of taxes and act like the more tax categories they pay in, the more taxes they pay relative to anyone else or what’s arguably ethical. The rest stands with me. I’m not sure what should be considered fair for profit- is 32% enough? How do you determine that? Where does profit even go, is that after paying everyone their salaries and bonuses? So, it just goes to upgraded equipment and whatnot, or is that also considered an expense and doesn’t come out of profit? Depending on what profit *actually is*, I may be inclined to say yeah- it should be up there at like 90% tax for these mega corps.
Because they rely on government funded infrastructure? I dont imagine so in Apple's specific case but many companies use government assistance to justify mininimum wage workers. More tax money in the system means more investment in areas, rather than being used purely for the next Board member's Yatch fund. And going after a dozen companies raking in Billions in pure after everything profits means you can relax the tax burden on everyday people? Those who can give more should give more.
Everyone relies on government funded infrastructure
Is revenue from Apple Pay under services?
Wouldn't this be Q1 and not Q2? Q2 usually runs april - june, this is until March 31st
Apple’s fiscal year is aligned differently
How come they only pay 4B in tax on 28B in operating profit?
Have I ever told you the story of the Irish/Caribbean off-shore patents and their licensing agreement to themselves?
I wonder how fines & penalties levied on Apple are categorised? Is it part of cost of revenue? Is it put under tax? Its not significant enough to be a category on its own, but would be fun to see the tax and profit treatment of that money.
Not very much taxes there for that much profit.
This doesn't explain anything, because it puts all the revenues and expenses into an information-losing blender. Because it doesn't break out margins on each of the revenue streams. Services brings in $24B, but what's the OPEX for them? What's the cost of revenue? How does it compare to MacBooks? Does Apple even make a profit on iPads? How much profit?
Source: Apple investor relations Tool: SankeyArt [Sankey diagram generator](http://sankeyart.com/) & illustrator
MacBook should instead be labeled “Macs”
People here don’t understand how taxes work apparently
So... a company making nearly $100 billion in a year only pays 5% tax? Fuck me
What no? They pay about 14% of profit in tax. That 5% is growth YoY
4 billion out of 91 billion revenue. Do they only pay on profit, not overall revenue?
That's how taxes work? You only pay tax on the money you actually make (Otherwise low margin high volume industries would pay more in tax than total profit and thus cease to exist)
Huh well learned something today. Would be nice if that’s how my taxes worked.. But shit - I’d fucking love to only pay 14% tax. That’s still ridiculously low.
Wow 24 BILLION. Thats sick.
And tim announced a $110 billion stock buyback. I can see that it could be more useful to pay more taxes and spend more on r&d. Having only the Vision Pro as the only new product and being dud. Jumping around making a vehicle. Tim surly is the go to guy to keep a boat steady while Jobs was the risk taker.
Am I missing it or where is the revenue from the apple store? Curious how much that is.
So for 28b profits only 4b taxes and here I am paying much higher %
Why does one of the largest corporation in the country have a lower tax rate as a percent of their income/profit than the average person?
Own the stock, don't own the phone.
It'd make sense for you to buy the phone if you have stock in it. But it's definitely just a drop in the bucket.
Still trying to make sense of the fact that they’re only paying 10% tax on gross profits while being headquartered in California.
How much do they make on dongles?
Maybe I'm missing it, but where do $110B in stock buybacks figure into this?
That’s not part of their quarterly income statement. They are simply spending $110B of their profits from their coffers to buy back stock
Companies which do stock buybacks have run out of ideas. $8 billion for R&D is a pittance compared to what [Apple has pissed away on kiting its stock price](https://www.fastcompany.com/91118042/apple-stock-share-buyback-largest-us-history-meaning): > Back in 2018, Apple initiated a share buyback for $100 billion—a record that held until now. >But between then and now, Apple also initiated five other share buybacks: $75 billion in 2019, $50 billion in 2020, $90 billion in 2021, $90 billion in 2022, and $90 billion in 2023. Including this year, that's about $600 billion of cash gone up in smoke. No wonder their recent products are lackluster. $8 billion in research per quarter is dwarfed by the bonfire of the equities at over $20 billion per quarter. Want to know why Boeing has a tough time coming up with new aircraft? Look no further than the [$60 billion they torched in buybacks at the same time they decided on the 737Max](https://www.commondreams.org/opinion/boeing-safety-stock-buybacks). Microsoft isn't much better, and Meta is about the same. Stock buybacks were considered market manipulation until Ronald Reagan's administration, always a fount of terrible ideas, legalized them in 1982. By sheer coincidence (/s), the decoupling between productivity and wages started right around then: keeping wages down produces more cash for the investor class.
They’re just a different form of dividends that aren’t taxed now but at sale. It wouldn’t make any difference in profit motive. Dividends have been around forever
That's what I can't figure. They have $24B in profit on this chart. Even with a bigger Q1 profit, they're basically spending every dollar of profit on stock buy backs?
They have been earning 24B/quarter for 10+ years. The profits just stay in Apple’s bank and once they accrue enough they do buybacks.
Apple has a lot of cash on their balance sheet.
What's not to understand? When you take your paycheck, you spend some of your money on necessary expenses like rent and food, and then you save (invest) the rest of it. What else should they do with this money? This profit figure *already* accounts for their R&D expenses, manufacturing costs, cost of materials, logistics, advertising, etc.
So your conjecture is that it's traditional and expected that companies spend 100% of every profit dollar in stock buybacks? And to ask otherwise is heresy? Believe it or not, once upon a time, companies cared more than just about keeping up their stock price.
Well I'd say it's not unexpected. Their R&D expenses have increased yoy, so they have reinvested some of their profits into increasing R&D. Again, the profit figure you're looking at is already after all expenses have been figured. So I ask you again, what else should they do with that money? Do you think they should dump even more into R&D? But you can't just throw an extra $20 billion in R&D money at your engineering department - it takes time to ramp that up. Infrastructure and headcount can't materialize out of no where. And if they went on a big irresponsible expansion spree, then when the bust comes they'd lay people off and people like you would be saying "They should have planned their resources better!"
I hope to live long enough to see the demise of the apple company.
What most bothers you about the co.? Mine is the attitude of the employees.
Mafia Tactics Extortion Intimidation Coercive control to ensure customer loyalty We look at you apple shills like you look at the southern Italians and wonder why they let the mafia do that to them.
I can crack open a PC and replace parts. I want it's went into an Apple store with my son's MacBook. I asked that guy behind the counter to open it up so I could see how it was laid out. He said it needed a new power supply. I asked, can I buy one from you? He looked at me, and screwed the thing closed with his proprietary screwdriver, and sniped at me"we don't sell parts." And pushed it back at me with the glare.
And yet none of those came in a fluffier
It would be great to see this presented over the previous quarter or fiscal year. Doesn’t really say anything useful tbh.
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>I was going off gross because the average person doesn’t get to deduct their cost of living before paying taxes If you wanted to do that then shouldnt it be done on revenue not gross profit? But anyways, businesses are abstractions. At the end of the day every dollar earned by apple will go into the pocket of some individual, and that individual wont be able to deduct their personal living expenses from those earnings. However, every person is able to deduct expenses that are incurred as a result of engaging in commerce. > They usually are around 15% and certainly aren’t taxed at 30% annually. Regardless of the minutiae 14% still seems very low but that is apparently an unpopular opinion. Lets imagine apple makes $100. If they pay 14% tax so they are left with $86. They give that $86 to Tim Cook as a dividend. Tim now pays 15% on that so he is left with $73.10, so overall tax rate is 27%
You do realize that they sell products outside of US too!?
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Their tax rate is 14% according to the chart? 4/28 = .1428 But also all of their employees pay tax, all of their products generate sales tax or VAT in places that have it, they also pay property tax.
All of their vendors pay taxes. Their employees pay taxes. The vendors pay SS taxes *for* the employees..
Wow cool same shit visual over and over again good job man well done
One quarter (Q2) and their profit is $24 billion. That is obscene. As a former Apple stock holder, I hated that they hoarded their money instead of paying a decent dividend. Sure, you’d get a special one-time dividend but those are rare. Instead they use the hoard to buy back shares, which doesn’t really help individual shareholders. It really helps insiders/executives by “manipulating” price-per-share metrics, which is what many executives have their bonuses tied to. Disgraceful.
Share buybacks absolutely help individual shareholders. Market cap is based on outstanding shares, and by lowering that number it drives the share price up. You’re just seeing growth from share price rather than a dividend. Additionally, share buybacks are not something that the consumer tends to price in. Dividends are really hard to lower without completely destroying consumer confidence.
Lol what. The benefit is you see appreciation in your equity rather than having to pay taxes on a dividend.
What do you think you’ll pay taxes on when you sell? Having a paper profit is worthless unless you sell. At least dividends I receive monthly or quarterly and only pay 15% tax. Much lower than if you have a short term gain (40%)
Have you ever heard of a 401k? It's the same idea. Let your money compound without paying taxes until you have to sell. It's a big difference over a long horizon.
So Apple Pays a 4% tax rate and most of us mere humans pay 20-25% ?
The tax is rate 14.3% since corporations are taxed on profit not revenue. Wouldn’t make a lot of sense to tax corporations on revenue.
Don't you have a VAT tax in the USA? Also, in Europe in most countries large corporates do pay 1-3% of revenue in many countries as some additional tax.
VAT or Sales Tax is paid by the consumer. Corporations will collect it and pass it on to the government, but would not be included in earnings reports. As far as I am aware, there is no hidden 1-3% revenue tax.
Still,however I look at this it's just crazy. Over 25% of the total revenue ended up as profit. In Europe you will very rarely see number above 10%, 5-8% is kind of more the norm. Apple definitely looks like it is in need of a huge tax increase or some other measures. Do they pay fair wages?
Apple exists in Europe as well, and these figures include sales in Europe. I think Apple is an outlier no matter where you’re from. Does Apple pay a fair wage? They get their hardware made in Chinese sweatshops, so probably not
Well they are ridiculously overpriced that it shows that brainwashing through marketing works well that's probably one reason. But to answer you, I checked in my country, I found 2 companies that are related to Apple here in the registry, they had a 17% percent rate as profit of total revenue so still high indeed, but lower then the graph
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It doesn’t list the tax rate on the chart, it gives the difference for each category year over year. For tax, they paid 5% more tax in Q2 of 2024 than Q2 of 2023.
Yeah I could see that tax rate being quadrupled and still making a lot of money.
The dongle hell ? Where is that stat?
Isn't the real answer by paying cents per day to slaves in other countries to make their goods which they resell for ridiculous markup? Pretty much the same business model as Nike.
Quick answer: corrupted motives & attempts at monopolizing 🙃 Also the colors chosen are quite ironic
Q2 isn’t done yet, this is Q1
Company FY (fiscal year) and CY (calendar year) are often different
Ok, person who doesn't know how company earnings work.
Are we gonna dick wave about who knows how earnings work? Apple is a consumer electronics company. They realize the plurality of their annual profits in Q1.